What's the Secret of This Storage Specialist's Success?

Chip designer LSI(NYSE: LSI) had a very good day on Wednesday. First, the company bumped up its first-quarter revenue guidance by 5%, along with a fresh earnings outlook. Management sees non-GAAP earnings per share landing between $0.12 and $0.16, smashing the $0.12 Wall Street consensus. Unexpected strength in the market for hard-drive controllers drove this very positive update.

Then Nomura analyst Romit Shah poured gasoline on the fire. In a note to clients, he says that LSI's strength probably is bad news for Marvell Technology(Nasdaq: MRVL) because LSI seems to be stealing market share from its only serious rival in the hard-drive space.

LSI's share prices jumped more than 7% on this one-two combination, while Marvell trailed the flat market on Wednesday. In support of Shah's opinion on the recovery of hard-drive sales, both Western Digital(NYSE: WDC) and Seagate Technologies(Nasdaq: STX) received 2% haircuts. Not that Mr. Market has access to any better or more correct information than top analysts or anything, but the wisdom of the crowd clearly agrees with Nomura here.

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